Governing Big Tech’s Pursuit of the “Next Billion Users” Michael Pisa and John Polcari Abstract Ten years ago, only 6 percent of the population in low-income and lower-middle-income countries had access to the internet. Today, nearly one in every three people there does. The rapid expansion of internet access across the globe is a welcome development, but it raises new policy challenges. And while there is broad agreement in the development community on the importance of getting digital policy “right,” too little attention has been paid to how policymakers in the developing world can best engage with the companies who dominate the digital landscape. As governments reassess their relationship with these companies, an increasing number are enacting policies that raise barriers to the cross-border flow of data and put the largely global and open nature of the internet at risk. In this paper, we review how internet use has evolved in the developing world over the last decade, with a focus on initiatives by big tech companies to reach the “Next Billion Users.” We then examine how concerns about data privacy, disinformation, and market concentration have manifested in lower-income countries and how policymakers have begun to respond. We close by considering ways the development community can support policymakers seeking to maximize the benefits of an open internet while minimizing its risks. Center for Global Development 2055 L Street NW Fifth Floor Washington DC 20036 202-416-4000 We are grateful to the people who took the time to review earlier drafts and provide their insights, www.cgdev.org including Masood Ahmed, Caroline Atkinson, Evelyn Douek, Alan Gelb, Kate Gough, Charles Kenny, Kay McGowan, Stela Mocan, Kyle Navis, Paul Nelson, Toby Phillips, William Savedoff, Charlotte Stanton, Priya Vora, An Wei Wang, and Richard Whitt. Any errors are solely our responsibility. This work is made available under the terms of the Creative Commons Michael Pisa and John Polcari. 2019. “Governing Big Tech’s Pursuit of the “Next Billion Users”” Attribution-NonCommercial 4.0 CGD Policy Paper. Washington, DC: Center for Global Development. https://www.cgdev.org/ license. publication/governing-big-techs-pursuit-next-billion-users CGD Policy Paper 138 www.cgdev.org February 2019 Contents Introduction ...................................................................................................................................... 1 1. Pursuing the Next Billion Users ................................................................................................ 3 Facebook and Google Carry the Torch ................................................................................... 9 The Path Forward ...................................................................................................................... 11 2. The Challenges Raised by Big Tech ........................................................................................ 13 Data Privacy ............................................................................................................................... 13 Disinformation ........................................................................................................................... 15 Market Concentration, Data, and Innovation ....................................................................... 20 3. A Better Path .............................................................................................................................. 23 Introduction When Senator Mark Warner warned Facebook COO Sheryl Sandberg, Twitter CEO Jack Dorsey, and an empty chair representing Google that “the era of the Wild West in social media is coming to an end” at a hearing in September 2018, it reflected the extent to which concerns about the role of big tech companies have shifted the debate in the United States from whether these companies should be regulated to what form that regulation should take.1 Given the global reach of the largest US digital platforms, how Congress ultimately decides to regulate the industry will have profound implications outside of the United States. The choices made on Capitol Hill will not only affect how these companies operate abroad, but also shape the set of regulatory options available to policymakers in other countries, particularly in lower income ones that lack the economic heft necessary to influence large tech firms on their own. Ahead of the hearing, Warner’s office drafted a set of policy proposals for regulating social media and technology firms focused on three areas of concern: the challenge of protecting consumers in the digital age, the capacity of social media platforms to promote disinformation, and the risk that market concentration will stifle innovation.2 While the Warner paper is exploratory in nature, it provides a good summary of the options Congress is most likely to consider moving forward. In this paper, we use these three areas of concern as a frame for exploring what the rapid growth of Big Tech in the developing world means for its policymakers grappling with how to maximize the economic and social benefits internet platforms provide while minimizing risks. In doing so, we recognize the hazard of lumping together countries with starkly different socioeconomic characteristics into a single “developing world” bucket. Certainly the online experience of a person in Zimbabwe, where a 1 GB monthly prepaid mobile broadband plan (the equivalent of a four hour chat on Skype) costs 33 percent of average income per capita, differs greatly from one in Egypt, where the same amount of data costs a hundred times less.3 Likewise, policymakers in Malaysia, where 80 percent of the country has internet access and users spend an average of 8.5 hours online daily, face a different set of policy challenges than those in Eritrea, where only 1 percent of the population uses the internet.4 However, we believe that considering the developing world as a distinct unit is useful for several reasons. First, with notable exceptions like China and India, these countries have limited, if any, leverage over large internet companies, given their small size and low income per capita.5 As way of comparison, consider the European Union’s General Data Protection Regulation (GDPR), which introduced sweeping changes to data privacy that the largest 1 US Senate Select Committee on Intelligence Hearing: Foreign Influence on Social Media, September 5, 2018. 2 Warner, Mark. Potential Policy Proposals for Regulation of Social Media and Technology Firms. July 30, 2018. 3 Alliance for Affordable Internet. Mobile Broadband Data Costs. September 2018. Confused.com. Data Usage Calculator. 4 World Bank. Individuals Using the Internet (% of Population). Hootsuite, We Are Social. Digital in 2018: World’s Internet Users Pass the 4 Billion Mark. January 30, 2018. 5 Dean, Marissa, Jonathan Donner, Chris Locke. Financial Inclusion in the Platform Era. September 11, 2018. 1 internet companies have chosen to comply with, often at great cost, because they are unwilling to forego the opportunity of doing business in the world’s second largest economy. In general, developing countries do not provide the same commercial impetus. Second, because so many people in the developing world are relatively new to the internet and often have fewer tools at their disposal to cross-check information, they may be more easily exploited by efforts to misuse their personal data and more susceptible to propaganda campaigns conducted online. Finally, although developing countries are equally if not more vulnerable to risks raised by digital platforms, little work has been done to consider how policymakers there should approach these challenges.6 And while there is broad agreement in the development community on the importance of getting digital policy “right,” too little attention has been paid to how policymakers can best engage with the companies who dominate the digital landscape. It is therefore not surprising that, as the Pathways for Prosperity Commission has emphasized, “few developing countries have a clear approach to [the] foundational question of digital governance and even fewer, if any, have a clear approach to regulating digital design and user protection.”7 The desire by a growing number of governments to reassess how they engage with large tech companies combined with a lack of rigorous evidence about policy efficacy has resulted in a mishmash of approaches—including outright bans, social media taxes, and data localization requirements—that endanger the (mostly) open nature of the internet. Many of these governments are also exploring ways to use the internet to support surveillance and stifle dissent, following the model provided by China.8 Concerns about balkanization of the internet can be traced back to the mid-2000s (for example, see Tim Wu’s 2004 blog), but the trend appears to have accelerated in recent years.9 The best way to confront this tendency is to address the challenges that a more free and open internet presents. There is no one-size-fits-all solution to the concerns raised by society’s growing reliance on internet services, and governments will approach them differently based on the importance they place on values like privacy, transparency, and freedom. But the development community can help policymakers make more informed decisions in several ways, including by building evidence on the costs and benefits of different regulatory responses, creating an intellectual framework around the treatment